Jeffrey K. McIlroy, MD, Inc., DAB CR5795 (2021)

DECISION

Petitioner, Jeffrey K. McIlroy, MD, Inc., is a physician-owned medical practice, located in Claremore, Oklahoma, that participates in the Medicare program as a supplier of services.  Until his death on January 4, 2018, Jeffrey K. McIlroy was the practice's sole owner.  Following his death, the Medicare contractor, acting on behalf of the Centers for Medicare and Medicaid Services (CMS), deactivated the practice's program participation, effective January 5, 2018.  The practice's new owner applied to reenroll in the program, and the Medicare contractor granted the application, with a retrospective billing date of March 4, 2018 (and, by inference, an effective date of April 3, 2018).  Petitioner now challenges that effective date.

Because Petitioner filed its subsequently-approved enrollment application on April 3, 2018, that is the correct effective date for its enrollment.  The contractor acted within its authority when it allowed the practice to bill retrospectively back to March 4, 2018.

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Background

The Medicare contractor, Novitas Solutions, deactivated Petitioner's Medicare program participation as of January 5, 2018, because the sole owner of the practice died and the practice's Medicare billing privileges were no longer valid.  CMS Ex. 2.  The practice's new owner reapplied on April 3, 2018, and, in a letter dated May 16, 2018, the contractor advised Petitioner that it approved its Medicare enrollment.  CMS Exs. 3-4.  Although the letter does not mention an effective date, an enrollment summary lists that date as March 4, 2018.  CMS Ex. 1 at 2.  In fact, as explained below, March 4 is the retrospective billing date.

In a letter dated June 28, 2018, Petitioner requested reconsideration, asking for a retroactive effective date of January 5.  CMS Ex. 5.  In a reconsidered determination, dated September 27, 2018, the Medicare contractor upheld the initial determination, affirming March 4, 2018, as the effective date of Petitioner's billing privileges.  CMS Ex. 6.  Petitioner appeals.

Decision on the written record.  Although CMS has moved for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.  My initial order instructed the parties to list any proposed witnesses and to submit their written direct testimony.  Acknowledgment and Prehearing Order at 3, 5 (¶¶ 4, 8) (Dec. 3, 2018).  The order also directed the parties to indicate which, if any, of the opposing side's witnesses the party wished to cross-examine and explained that an in-person hearing would be needed only if a party wishes to cross-examine the opposing side's witness.  Id. at 5-6 (¶¶ 9, 10).  CMS lists no witnesses.  Petitioner lists one witness, but CMS has not asked to cross-examine him.  See id. at 5 (¶ 9).  An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record without considering whether the standards for summary judgment are met.

CMS submits its motion and brief (CMS Br.), along with six exhibits (CMS Exs. 1-6).  Petitioner submits a response in opposition (P. Br.) with three exhibits (P. Exs. 1-3).  In the absence of any objections, I admit into evidence CMS Exs. 1-6 and P. Exs. 1-3.

Petitioner's discovery request.  Petitioner seeks discovery from CMS and has filed interrogatories and requests for production of documents.  In the alternative, it asks me to issue a subpoena to an unnamed witness ("CMS"), requesting the information and documents identified in its discovery request.

CMS opposes, pointing out that, except for subpoenas (which may be issued under limited circumstances), the regulations governing these proceedings (42 C.F.R. Part 498) do not allow for discovery.  CMS also argues that the information sought is irrelevant and that some of it is protected by the deliberative process privilege.

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CMS's positions are correct.  The regulations governing these proceedings do not provide "for the sort of freewheeling discovery mechanisms available in some court proceedings."  Ridgeview Hosp., Ruling No. 2015-1 (Jan. 12, 2015); Michael Turano, M.D., DAB No. 2922 at 14 (2019); Oaks of Mid-City Nursing & Rehab. Ctr., DAB No. 2375 at 32 n.16 (2011).  The sole discovery vehicle available is the subpoena, but only if the party shows that its issuance is "reasonably necessary for the full presentation of a case."  42 C.F.R. § 498.58(a).  The request must:  identify the witness to be produced; describe "with sufficient particularity" the witness's address or location; specify the pertinent facts the party expects to establish by means of the witness testimony; and indicate why those facts could not be established without use of a subpoena.  42 C.F.R. § 498.58(c); Turano, DAB No. 2922 at 15.

Petitioner is thus not entitled to responses to interrogatories or the production of documents.  I deny Petitioner's subpoena request because it does not meet any of the regulatory criteria.  It does not even identify a witness, much less describe with particularity an address or location.  Moreover, Petitioner has not shown that my issuing a subpoena is reasonably necessary for the full presentation of its case.  In fact, the request seeks information regarding the contractor's deliberations here, which are irrelevant and likely protected by the deliberative process privilege.  Moreover, as discussed below, the non-deliberative information Petitioner seeks has either been provided or is irrelevant.

Discussion

Petitioner filed its subsequently-approved enrollment application on April 3, 2018, and its Medicare reactivation enrollment can be no earlier than that date, although it may retrospectively bill for services provided up to thirty days prior to its enrollment if certain criteria are met.  42 C.F.R. §§ 424.520(d), 424.521(a)(1).1

Enrollment.  Petitioner participates in the Medicare program as a "supplier" of services.  Social Security Act § 1861(d); 42 C.F.R. § 498.2.  To receive Medicare payments for the services furnished to program beneficiaries, a prospective supplier must enroll in the program.  42 C.F.R. § 424.505.  "Enrollment" is the process by which CMS and its contractors:  1) identify the prospective supplier; 2) validate the supplier's eligibility to provide items or services to Medicare beneficiaries; 3) identify and confirm a supplier's owners and practice location; and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502.

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To enroll, a prospective supplier must complete and submit an enrollment application.  42 C.F.R. §§ 424.510(d)(1), 424.515(a).  An enrollment application is either a CMS‑approved paper application or an electronic process approved by the Office of Management and Budget.  42 C.F.R. § 424.502.2   When CMS determines that a prospective supplier meets the applicable enrollment requirements, it grants Medicare billing privileges, which means that the supplier can submit claims and receive payments from Medicare for covered services provided to program beneficiaries.  For a physician or non-physician practitioner organization, the effective date "is the later of [the] date of filing" a subsequently-approved enrollment application or "[t]he date that the supplier first began furnishing services at a new practice location."  42 C.F.R. § 424.520(d) (emphasis added); Howard M. Sokoloff, DPM, DAB No. 2972 (2019); Urology Grp. of NJ, LLC, DAB No. 2860 (2018); Willie Goffney, Jr., M.D., DAB No. 2763 at 3-5 (2017), aff'd sub nom. Goffney v. Azar, No. CV 17-8032 MRW (C.D. Cal. Sept. 25, 2019).

Deactivation.  Deactivation means that a supplier's billing privileges are stopped but can be restored when the supplier submits updated information.  42 C.F.R. § 424.502.  Here, because Dr. McIlroy was the sole owner of the medical practice, its billing privileges were deactivated at the time of his death.  See Medicare Program Integrity Manual, Ch. 10 § 4.20 (Rev. 291, Issued:  June 12, 2009, Effective:  Jan. 1, 2008).3  The Medicare contractor notified Petitioner of the deactivation in a February 5, 2018 letter.  CMS Ex. 2.  To reactivate its billing privileges, a supplier must complete and submit a new enrollment application.  42 C.F.R. § 424.540(b)(1).  It is settled that, following deactivation, section 424.520(d) governs the effective date of reenrollment.  Sokoloff, DAB No. 2972 at 6-7; Urology Grp., DAB No. 2860 at 7; Goffney, DAB No. 2763 at 7.

Petitioner asks that I reverse the deactivation.  However, I have no authority to review a deactivation.  Sokoloff, DAB No. 2972 at 6; Ark. Health Grp., DAB No. 2929 at 7-9 (2019).

Effective date.  Here, on April 3, 2018, the Medicare contractor received Petitioner's enrollment application (CMS-855I), which it subsequently approved.  CMS Ex. 3 at 77.

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Thus, pursuant to section 424.520(d), the date Petitioner filed its subsequently-approved enrollment application – April 3, 2018 – is the correct effective date of enrollment.  Sokoloff, DAB No. 2972; Urology Grp., DAB No. 2860; Goffney, DAB No. 2763 at 7.

Pursuant to its authority under section 424.521(a)(1), CMS allowed Petitioner to bill retrospectively, back to March 4, 2018.

I may not grant Petitioner an earlier effective date based on any equitable or policy arguments.  Sokoloff, DAB No. 2972 at 9.

Conclusion

Petitioner argues that the contractor incorrectly deactivated its billing privileges when its sole owner died.  I have no authority to review the deactivation.

Because Petitioner filed its subsequently-approved enrollment application on April 3, 2018, CMS properly granted its Medicare enrollment effective that date.  CMS was also authorized to allow the practice to bill retrospectively.

1. I make this one finding of fact/conclusion of law.
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2. CMS's electronic process is referred to as PECOS (Provider Enrollment, Chain, and Ownership System).
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3. While I agree that sub-regulatory authority is generally non-binding, it is entitled to some deference.  And here, where Petitioner was enrolled as a solely-owned medical practice, CMS could reasonably deactivate when that sole owner died.  Petitioner asserts that the practice underwent a change of ownership, but that did not occur until February 22, 2018, after Petitioner received notice of the deactivation.  P. Ex. 1 at 2 (Featherston Decl. ¶ 12); P. Br. at 5.  So, following Dr. McIlroy's death, the practice had no owner for purposes of its Medicare enrollment.  I am aware of no authority (and Petitioner offers none) that would compel CMS to continue paying an entity under those circumstances.
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